BHP forecasts further tough short term

25 Oct 2012, 10:37 pm   -   Source: AAP

BHP Billiton can look toward ongoing robust results despite a forecast of ongoing market volatility in China and Europe, says CEO Marius Kloppers.

BHP Billiton is bracing for continued volatility in European and Chinese markets as the global miner manages increased regulatory pressures.

Chief executive of the world's biggest mining company, Marius Kloppers, on Thursday told shareholders of forecast "short term" instability, similar to that of which shaped 2012 financial year results.

"We believe the volatility we experienced during the last financial year will continue in the short term, as concerns surrounding the instability of the Eurozone and the concerns on China's growth continue to weigh on market sentiment," Mr Kloppers told the stakeholder meeting in London.

The CEO also paid subtle recognition of, among the policies of other countries, the Australian government's minerals resource rent tax (MRRT), as he spoke of the need to juggle growing external cost factors.

"We have experienced very significant cost escalation in the industry, compounded by a strengthening in the currencies of key producing countries," he said.

"In the face of higher prices, we have also seen a trend towards some governments seeking to increase royalties and taxes, which placed further pressure on costs."

He later added: "collaboration between industry and government is critical to restoring cost competitiveness in our sector".

BHP's net earnings decreased by 15 per cent to $US27.2 billion for the 2012 financial year, in the face of China's easing commodity demands.

Despite the result and the company's continued pressures, Mr Kloppers championed BHP's ongoing "success" and strong shareholder returns.

"Our portfolio is perfectly suited to the economic conditions that lie ahead, and it is for this reason we are even better placed to outperform our peers over the next decade," he said.

Company chairman Jac Nasser addressed the meeting about executive remuneration, defending BHP's pay formula and welcoming the actions of the Australian and UK governments to introduce greater transparency and shareholder involvement.

Outside the central London venue of Thursday's shareholder meeting a small group of protesters braved cold and wet conditions to fly banners, including "BHP Billiton, dirty energy", and "BHP Billiton, stop destroying communities, lives and land for coal".

The company will hold its AGM on November 29 in Sydney.

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